*Please forward this information and give credit to USA HELP, Inc. Do not cut and paste any portion.*

If your bank improperly or illegally foreclosed on your home between January 1, 2008 and December 31, 2011, you may qualify for assistance. The details still need to be filed and approved by the Court. This is reported to occur by months end.

What type of relief might you get?  Approximately $2,000 if one of the top five national banks foreclosed on you using, well, not sure how to put this nicely, fraudulent means.

The deal estimates 750,000 American homeowners were illegally foreclosed on using forgery or other methods to take homes that they were not legally entitled to take, at least at the time they took them.

I know there are plenty who bought more than they should, never qualified based on traditional underwriting standards in the first place and would have likely lost their home regardless. But, there are also a huge number of people out there who had a onetime hardship, followed the advice from the President and so called experts and went directly to their bank, followed their instructions perfectly and then lost their home while they were making the very trial payments the banks put in writing for them to make. For the hundreds of thousands of people I’m referring to, to offer them 2K is mindboggling.

This was their home. This is where they were raising their family. They had a setback, drained their savings and retirement, did everything they were told to do by their bank and then learned the hard way about “dual tracking” and how the bank can pick up where they left off in the foreclosure process and foreclose on you with virtually no advance warning or notice.

*Please forward this information and give credit to USA HELP, Inc. Do not cut and paste any portion.*

Borrowers around the country owe more than $700 billion more on their homes than the homes are worth; the settlement offers $26 billion in fines and relief to homeowners. Supposedly, approximately 17 billion is being set aside for principle write downs. Let’s do the math together; 700 minus 17 equals 683 billion in remaining negative equity.

Negative equity is the irrefutable number one cause for defaults at the moment. Why? Because if you’re suffering financially and you cannot move due to a lack of equity, or you have done the math yourself and decided that you had better focus on your retirement rather than martyrdom, you chose.

Approximately one million homeowners will have their mortgage debt reduced or loans refinanced at a lower interest rate. Experts estimate that 11 million U.S. homeowners are underwater. Currently 4 million are in foreclosure or seriously delinquent. Let’s see, what is the math here… 11 plus 4 equals 15, minus the 1 that may be helped, that leaves, wait, let me check…yep, 14 million out in the cold.

I believe this is why the settlement is receiving criticism.

The settlement is limited to five big banks that own the mortgages directly. It excludes private investors, other banks and Fannie Mae and Freddie Mac, as well as FHA. These agencies account for about 56% of all existing loans. This makes the relief pie even smaller.

The settlement suppossedly states that for every dollar a servicer writes off, it will get around 50 cents of the $17 billion in settlement “credits.”

Officials were quick to point out last week that the settlement would result in roughly $34 billion in total principal forgiveness over the next three years, assuming the banks can hire the number of people necessary to meet this obligation.

I have yet to read about any penalties if this three year time frame is not met. Therefore I am concluding one does not exist and I do not believe it is too much of a stretch to believe this time frame may get extended so long as a “good faith effort” has been demonstrated.

California AG Kamala Harris said she expects roughly 250,000 homeowners in the state to get a write down over the next three years because of the deal. Another 140,000 could get the $2,000 restitution.

David Stevens, president at the Mortgage Bankers Association made this statement: “NPV (Net Present Value Test) tests and current investor consent requirements mean that the vast majority of principal reductions agreed to in the settlement will come from whole loans held on participating banks’ existing books”. This means the five banks actually own the mortgage and are not simply servicing them for other investors. This typically accounts for approximately 15% or less of a banks servicing portfolio.

*Please forward this information and give credit to USA HELP, Inc. Do not cut and paste any portion.*

With respect to our military that was illegally foreclosed on while protecting the banker’s freedoms…

This is better and I like it. However, regular Americans also deserve similar protection. How many of the estimated 750,000 the settlement refers to were veterans?

Four of the five banks participating in the settlement ; JPMorgan Chase, Wells Fargo, Citigroup, and Ally/GMAC will review foreclosures of military members since January 2006, identifying instances of violation of the Service members Civil Relief Act, according to the Department of Justice (DOJ).

Wells Fargo, Citigroup, and Ally agreed to compensate service members a minimum of $116,785 in instances of wrongful foreclosure. They will also reimburse the service members for lost equity.
In instances of wrongful foreclosure, JPMorgan Chase will allow service members to return to their homes and eliminate any debt on the homeowner’s record, or the service member will be paid the full value of his or her home at the time of sale.

All relief provided to service members through the provisions stated in the settlement are in addition to the $25 billion the banks will pay in penalties and borrower relief.

Bank of America, the fifth bank in the national settlement, worked out a $20 million settlement with the DOJ in May 2011 regarding some instances of wrongful foreclosure on military members.
The federal and multi-state settlement does not require BofA to review military foreclosures or interest rates, according to the DOJ.

And there you have it. After reading countless articles this is my summary. As more details emerge I of course will write about them.

Chris Sorensen *Please forward this information and give credit to USA HELP, Inc. Do not cut and paste any portion.*

**Updated as of February 15, 2012 at 5:44PM. This info has been cut down to avoid repeating what I wrote above.

SUMMARY OF KEY SETTLEMENT TERMS from The Attorney Generals Themselves

II. Refinancing of Underwater Homes

To assist homeowners who are not delinquent on their payments but cannot refinance to lower rates because of negative equity, the banks must offer refinance programs totaling at least $3 billion. The banks will be required to notify eligible homeowners of the availability of these programs. To be eligible, a borrower must be current on mortgage payments, have a loan to value ratio in excess of 100%, and must have a current interest rate in excess of 5.25%. The refinanced rate must reduce monthly payments by at least $100.

III. Mortgage Servicing Reforms

A major component of the settlement is the comprehensive reform of mortgage servicing practices. The new standards will prevent mortgage servicers from engaging in robo-signing and other improper foreclosure practices. The standards will require banks to offer loss mitigation alternatives to borrowers before pursuing foreclosure. They also increase the transparency of the loss mitigation process, impose time lines to respond to borrowers, and restrict the unfair practice of “dual tracking,” where foreclosure is initiated despite the borrower’s engagement in a loss mitigation process.

Specific new servicing standards include (Again, I cut out the stuff that is not actually directly related to the consumer):

• Holders of loans and their legal standing to foreclose must be documented and disclosed to borrowers.

• Borrowers must be sent a pre-foreclosure notice that will include a summary of loss mitigation options offered, an account summary, description of facts supporting lender’s right to foreclose, and a notice that the borrower may request a copy of the loan note and the identity of the investor holding the loan.

• Borrowers must be thoroughly evaluated for all available loss mitigation options before foreclosure referral, and banks must act on loss mitigation applications before referring loans to foreclosure; i.e. “dual tracking” will be restricted.

• Denials of loss mitigation relief must be automatically reviewed, with a right to appeal for borrowers.

• Banks must implement procedures to ensure accuracy of accounts and default fees, including regular audits, detailed monthly billing statements and enhanced billing dispute rights for borrowers.

• Banks are required to adopt procedures to oversee foreclosure firms, trustees and other agents.

• Banks will have specific loss mitigation obligations, including customer outreach and communications, time lines to respond to loss mitigation applications, and e-portals for borrowers to keep informed of loan modification status.

• Banks are required to designate an employee as a continuing single point of contact to assist borrowers seeking loss mitigation assistance.

• Servicers are required to expedite and facilitate short sales of distressed properties.

• Restrictions are imposed on default fees, late fees, third-party fees, and force-placed insurance.

VII. Release of Claims

The proposed Release contains a broad release of the banks’ conduct related to mortgage loan servicing, foreclosure preparation, and mortgage loan origination services. Claims based on these areas of past conduct by the banks cannot be brought by state attorneys general or banking regulators.

The Release applies only to the named bank parties. It does not extend to third parties who may have provided default or foreclosure services for the banks. Notably, claims against MERSCORP, Inc. or Mortgage Electronic Registration Systems, Inc. (MERS) are not released.

Securitization claims, including claims of state and local pension funds, and including investor claims related to the formation, marketing or offering of securities, are fully preserved. Other claims that are not released include violations of state fair lending laws, criminal law enforcement, claims of state agencies having independent regulatory jurisdiction, claims of county recorders for fees, and actions to quiet title to foreclosed properties. Of course, the Release does not affect the rights of any individuals or entities to pursue their own claims for relief.